JPM & MET Call Spreads

So both of these stocks are about $7 above the naked call prices. Both spreads are currently worth about 73% of the maximum value. This is 5 months in to what was originally a 22-month spread. I looked at what the spread would be worth if the stocks goes up another $5, I would only be picking up another .85. However, if the stocks goes down $5 I lose more than .85. So clearly the short-term risk/reward favors liquidating the spreads. Then I looked at the Jan 2010 expiration with the same strike prices just to get an idea of if these were Jan 10 instead of Jan 11 spreads, how would it look. At today's prices the liquidation value of the spread would be 87% of the total possible because you've still got 5 months of time premium even though you're $7 in-the-money. To me it's not worth waiting another 12 months to pick up another 14% of that remaining 23% possible maximum gain. So I'm leaning heavily towards liquidating on Monday unless we open down big.

I think if you told me 6 months ago that I could pick up 73% of the possible gain in 5 months I would have been excited. If you told me that at expiration the spread was very profitable, let's say 73% of the possible, I would have been happy. So here is why I'm posting about this, I never had a plan for this trade. I made the decision in about 15 minutes simply because over the weekend back in March and looking at the closing prices, it just seemed like the risk/reward trade off was appealing. I went with the farthest expirations available at the time in case I was wrong. So I learned a lot about spreads, their timing, the risk/reward trade off at different points in the trade, and I can exit and be above 70% profitable. So I know you guys already know this, but having a plan is pretty damn important. Historically I've just kind of flown by the seat of my pants, and that's why I can't really point to anything I've done over the last few years and say "this is what I do." I don't really know what I do other than just keep trying new things. So I think I would like to close out and get real close to 100% cash as I finish up my last 16 weeks of school and decide what I'm going to do with the next phase of my life. Thanks for listening!!